Part 2:

LEADERS in the Competitive Space of Genome Sequencing of Genetic Mutations for Therapeutic Drug Selection in Cancer Personalized Treatment

Foundation Medicine, a Cambridge, Mass.-based company that sells a $5,800 diagnostic test that uses DNA sequencing to help doctors guess which cancer drugs would be helpful in fighting a particular patient’s tumor.

CAMBRIDGE, Mass., January 8, 2013 – Foundation Medicine, Inc. today announced an expansion of its Series B financing, raising an additional $13.5 million and bringing the total raised in the round to $56 million. The new investors include Bill Gates, Evan Jones and Yuri Milner.

“Advances in understanding the human genome are having a dramatic impact on almost every area of medicine,” said Bill Gates. “Foundation Medicine’s approach in harnessing the power of genomic data to improve care for cancer patients could represent an extremely important step forward in improving routine cancer care. I’m happy to be supporting this quite promising approach.”

Foundation, which previously listed Kleiner Perkins Caulfield & Byers and Google Ventures, raised $13.5 million in the series B round in which Gates participated, bringing its total take to $56 million. The other investors were Facebook billionaire Yuri Milner, who also recently invested in the personal genomics company 23andMe, and Evan Jones, the diagnostics industry legend who founded DiGene, which was sold to Qiagen for $1.6 billion in 2007. Jones will also join Foundation’s board.

It now costs as little as $1,000 to get a fairly accurate readout of the 6 billion letters of DNA code for any single person.

In cancer, the approach right now is usually not to sequence all a patient’s DNA or that of his tumor, but instead to focus on particular genetic mutations in the tumor that might provide clues as to what medicines to try. Major cancer centers are using this approach with patients for whom it’s not obvious which medicine represents the best bet. Foundation’s approach has been to provide that kind of testing to a larger audience. To do so, it uses the DNA sequencing machines made by Illumina and other companies.

“What we want to do is take this testing to the community practices to treat patients where they live,” Michael Pellini, Foundation’s chief executive, 2011.

Researchers used a gene test made by closely held Foundation Medicine Inc. to sequence 145 cancer-associated genes in 40 colon tumor samples and 24 lung tumors.

They found that

53 percent of colon tumors and

71 percent of lung tumors

had mutations that may be attacked with cancer medicines on the market or in human trials, according to the study published in Nature Medicine. In some cases, the results revealed what drugs wouldn’t work against the tumors.

The study from researchers at Foundation Medicine and the Dana-Farber Cancer Institute in Boston, shows the value of using DNA sequencing machines to optimize treatment by matching drugs against specific gene abnormalities inside a patient’s tumor, said Pasi Janne, a study co-author.

Finding Gene Abnormalities

Maureen Cronin, a study co-author and molecular pharmacologist at Cambridge, Massachusetts-based Foundation Medicine, said her company was finding new gene abnormalities at a much higher rate than they expected as it performs DNA scans on tumors.

“We expected to find new things, but not at the frequency we are finding them,” she said in a telephone interview. The results “are very surprising.”

The study also suggests cancer researchers may need to rethink the way they classify and treat the disease, Cronin said. The particular genetic abnormality inside tumor DNA may matter as much as what organ the tumor came from, she said.

Pfizer is aware of the new lung cancer gene finding and “believes the data are interesting,” said Jenifer Antonacci, a company spokeswoman, in an e-mail.

Laura Woodin, a spokeswoman for London-based AstraZeneca, said the company “is constantly alert to new developments and research in the science of oncology and we review relevant, peer reviewed studies for what they might mean for patients and drug development.”

Foundation Medicine performs a $5,800 test that takes tumor samples and sequences DNA from 200 genes relevant to cancer. It is funded with $33.5 million in venture capital from Third Rock Ventures, Kleiner Perkins Caufield & Byers and Google Ventures, according to its website. $56 Millions on January 8, 2013.

It is difficult to analyze DNA data, Foundation’s test is anything but a full genome, it’s a $6,000 .02% of the genome, showing how much of the problem of using genetic information will need to coming from solving computational and analytical problems — exactly the kind of thing that Bill Gates has always been interested in both at Microsoft and in his work getting lifesaving vaccines to children all around the world.

Physicians need to incorporate the latest molecular diagnostic tests to help guide treatment of cancer patients due to the growing number of molecular subtypes that are understood across tumor types.

As more targeted therapies are approved for new molecular subtypes, the number of tests that need to be performed on each patient to determine their subtype increases and very quickly exhausts the very small amount of tumor tissue that is available in routine, clinical samples

Importantly, as patients’ molecular subtypes are more broadly incorporated into physician treatment decisions, we continue to further our understanding of a pathway view of cancer. Patients with different tumor types can have same molecular subtype – often, these therapies are applicable across tumor types since they are targeting the same pathway.

The DNA sequencing field has drawn increased interest from pharmaceutical makers focused on developing gene-targeted therapies. Roche Holding AG (ROG), the world’s biggest maker of cancer medicines, last month began a $5.7 billion hostile takeover offer for Illumina Inc., the maker of gene sequencing machines that Foundation Medicine uses in its tests.

Pfizer’s Sutent

The researchers also spotted a previously unknown genetic flaw in 2 percent of 561 lung tumors tested. The flaw activates a growth-boosting protein targeted by Pfizer Inc. (PFE)’s kidney- cancer drug Sutent, hinting that the treatment from the New York-based drugmaker may also work in these lung patients, said Janne. He wants to begin a trial of Sutent in lung-cancer patients with the gene change by year end, he said.

Researchers in Japan also reported finding the same new genetic change in a fraction of lung tumors, according to two other studies published today in Nature Medicine. Until the three new studies, the genetic change had never been seen in any cancer, said Dr. Pasi Janne.

The change fuses two unrelated genes together to form KIF5B-RET, turning on a growth-driving protein called RET that is usually not active in lung cells.

When Pasi Janne and his collaborators treated cells with the aberrant gene using Pfizer’s Sutent or AstraZeneca Plc (AZN)’s thyroid-cancer drug Caprelsa, the cells died. Both drugs block RET.